STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
PRESTON HURSEY, JR., )
)
Petitioner, )
)
vs. ) CASE NO. 90-3069
)
DEPARTMENT OF INSURANCE, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, this cause came on for hearing before P. Michael Ruff, duly-designated Hearing Officer of the Division of Administrative Hearings, on September 21, 1990, in Tallahassee, Florida.
APPEARANCES
FOR PETITIONER: Preston Hursey, Jr., pro se
Post Office Box 43643 Washington, DC 20010
FOR RESPONDENT: Willis F. Melvin, Jr., Esq.
Andrew Levine, Esq. Department of Insurance Division of Legal Services
412 Larson Building Tallahassee, FL 32399-0300
STATEMENT OF THE ISSUE
The issue to be resolved in this proceeding concerns whether the Petitioner's application for licensure as a nonresident life, health and variable annuities insurance agent should be denied on the basis of his having pled guilty and been convicted of a felony. Embodied within that general issue are the issues of whether the felony involved is one of moral turpitude and whether the conviction, and the circumstances surrounding it, demonstrate that the Petitioner lacks fitness or trustworthiness to engage in the business of insurance.
PRELIMINARY STATEMENT
The Petitioner, Preston Hursey, Jr., applied to the Respondent for licensure as a nonresident life, health, and variable annuities insurance agent (nonresident agent). The Respondent agency denied that application by letter of April 9, 1990, based upon its position that the Respondent had been found guilty of a felony. The felony involved was that under Federal law of "aiding and assisting preparation of a false tax return". The Respondent asserts that this was a felony involving moral turpitude in violation of Section 626.611(1)(7)(14), Florida Statutes, Section 626.621(8), Florida Statutes, and
Section 626.785(1), Florida Statutes, in that the alleged commission of the felony demonstrates a lack of fitness, trustworthiness or qualification to engage in the business of insurance.
The Petitioner disputed the allegations in the letter of denial and requested a formal hearing pursuant to Section 120.57(1), Florida Statutes. The cause was ultimately referred to the undersigned hearing officer.
The case came on for hearing as noticed. At the hearing, the Petitioner testified in his own behalf, and the Respondent called no witnesses. The Petitioner offered four exhibits which were received into evidence, and the Respondent offered one composite exhibit which was admitted into evidence.
The parties elected to have the proceedings transcribed and were accorded the right to file proposed findings of fact and conclusions of law in the form of proposed recommended orders. Those pleadings were timely submitted and have been considered in the rendition of this Recommended Order. The proposed findings of fact are specifically ruled upon in the Appendix attached hereto and incorporated by reference herein.
FINDINGS OF FACT
The Petitioner, Preston Hursey, Jr., filed an application for qualification in Florida as a nonresident life, health and variable annuities agent. The application was filed on November 13, 1989. On April 9, 1990, the Department of Insurance issued a letter of denial with regard to that application based upon a felony conviction of the Petitioner in the past. The Respondent is an agency of the State of Florida charged, in pertinent part, with enforcing the licensure, admission and continuing practice standards for insurance agents of all types, embodied in Chapter 626, Florida Statutes, and with regulating the admission of persons to licensure as insurance agents in the State of Florida.
On August 12, 1988, an Information was filed with the United States District Court for the District of Columbia, charging the Petitioner with three felony counts involving "aiding or assisting presentation of false income tax return". That is a felony violation of Title 26 U.S.C., Sections 7206(2). On November 15, 1989, the Petitioner was found guilty of three counts of aiding or assisting presentation of false income tax return in violation of that statutory section. The actual conduct for which he was convicted occurred prior to the charges.
Prior to 1984, the Petitioner worked for some years as a medical examiner for insurance companies, taking medical histories, blood pressures, pulses and the like, for purposes of establishing insurance coverage for clients of the companies. Some time in early 1984, the Petitioner approached American Dynamics Corporation, as a client, with the intent of availing himself of the financial planning services of that company with the intent of saving on income taxes. The company was apparently counseling clients as to tax shelters in which they could invest or which they could claim, as a means of' avoidance of federal income tax. The Petitioner became very interested in that tax saving procedure and sometime in 1984 became involved with the firm as one of its financial counselor employees. The firm trained him in the service they offered to taxpayers, which involved financial planning by using trusts to defer taxes, as well as other means of sheltering income from tax liability. The company and the Petitioner counseled numerous clients and assisted them in taking advantage of alleged tax shelters, including the final act of preparing their tax returns.
During the course of going to hearings with his clients, when their tax returns came under question by the Internal Revenue Service, the Petitioner became aware that apparently the service would not accept the tax shelter devices being used by his company and him as a legitimate means of avoiding taxes. He then sought legal advice from a tax attorney and received an opinion from him that the tax avoidance counseling methods, devices and tax return preparation the Petitioner and his employer were engaging in were not legal, and that the Petitioner should advise anyone he knew involved in such schemes to terminate their relationship. The Petitioner acted on that advice, terminated his relationship with the company and recommended to his clients that they terminate their relationship with the company and the tax avoidance devices being used.
Through hindsight and learning more about relevant tax law in the last four to five years since the conduct occurred, the Petitioner realizes that the tax shelter schemes marketed by his employer at that time and, by himself, did not make financial or legal sense. The Petitioner at that time had very little training in financial counseling or advising and very little training in the Federal income tax laws arid regulations. In retrospect, after receiving much more such training as an agent of New York Life Insurance Company since that time, he realized the significance of the error he and his former employer committed. When the tax returns were prepared by the Petitioner and others employed with the firm involved, the tax return accurately reflected the gross income of he taxpayer, the "W2 forms", and all appropriate documentation. Then, the gross income of the taxpayer was shown as reduced by the amount of funds affected by the tax shelter system marketed by the Petitioner's former employer and the Petitioner. There was a statement on the tax return itself explaining the disparity in taxable income so that basically the Internal Revenue Service had the facts and circumstances of such situations disclosed to it. It, however, deemed anyone marketing such tax shelters as engaged in marketing "abusive tax shelters", in effect, in violation of the Internal Revenue Code.
Ultimately, the Petitioner was prosecuted along with others involved in the transactions and suffered a felony conviction of three counts of violation of the statute referenced above. The Petitioner has steadfastly maintained both before and after his conviction that he had no intent to violate the tax laws of the United States, but rather believed, until he sought a legal opinion from a qualified attorney, that the service he was marketing was a legal one. After he came under prosecution by the Justice Department for the violation, the Petitioner cooperated fully with the Internal Revenue Service and the Justice Department. The felony violation of which he was convicted, by guilty plea, carried a sentence of three years imprisonment, one year for each tax return involved. That sentence was reduced by the court; however, in consideration of the circumstances of the Petitioner's offense and his cooperation with the prosecuting authorities, to one month of "work release", which he served by working during the day for senior citizens organizations and returning to a confinement facility in the evening. He also was required to render 200 hours of community service, which he has completed, and three years probation. Because of his excellent attitude and behavior and his demonstrated activities designed to further his education in the insurance and securities field, his successful pursuit of the insurance and securities marketing profession in other states and his obviously-positive motivation, his probation officer has recommended that his probation be terminated early, after only two years of it would have been completed in November, 1990.
The sentence was reduced because of the Petitioner's positive record in his community, the fact that he had no prior criminal history and because of widespread support by responsible members of the community and by the probation officers who reviewed his case and situation. The judge, upon sentencing, also noted that he was impressed by the fact that the Petitioner wanted to continue to work in the insurance and securities field and was the sole support of a young son whom he was supporting and caring for as an active parent. He continues to do that.
The record establishes that the Petitioner's conviction was the result of a guilty plea. That plea resulted from a negotiated "plea bargain" settlement with the prosecuting authorities. The Petitioner established with unrefuted testimony, that he never had any willful intent to commit a crime or defraud the Federal government and the Internal Revenue Service. While he had a general intent to offer the tax advice involved to clients and assist them in engaging in tax shelter arrangements and in preparing the related tax returns, he had no specific intent to commit acts which he knew to be illegal when he committed them, nor which he believed amounted to fraud or deceit of the Internal Revenue Service. Although he pled guilty to a crime involving, by the language of the above--cited statute, the element of falsity, which bespeaks of deceit or fraud, the evidence shows that the Petitioner harbored no such fraudulent or deceitful intent. This is corroborated by the fact that the Petitioner and his clients disclosed all income on the tax return and simply disclosed that a portion of it was sheltered, which procedure was determined by the Internal Revenue Service to be illegal. There was no evidence of record to indicate that the Petitioner sought to conceal income or otherwise commit a false or fraudulent act in the course of his financial and tax advice to these clients, nor in the preparation of their tax returns for submittal. While the statute he is convicted of violating appears to involve the element of moral turpitude because it refers to false or fraudulent tax returns, it is a very general type of charge which can cover many types of activities or conduct. Consequently, one should consider the specific conduct involved in a given instance, such as this one, to determine whether the crime committed factually involved moral turpitude. Based upon the unrefuted evidence of record culminating in the findings of fact made above, it is clear that the Petitioner committed no conduct involving moral turpitude at the time the activity in question was engaged in for the above reasons.
The Petitioner has been in no legal altercation, criminal or otherwise, before or since the instance which occurred in 1984. He has become licensed in Washington DC, Maryland and Virginia as an insurance agent and as a broker agent. He represents numerous insurance companies, including, for approximately five years, the New York Life Insurance Company and other reputable companies. He has pursued his continuing education requirements and has earned more requirements than he needs for licensure in Florida and Maryland. He is actively seeking to improve his professional standing and competence in the insurance and securities field and is highly motivated to continue doing so. A great deal of his motivation comes from the fact that he is the sole support of his young 11-year-old son. He enjoys the insurance profession because it gives him time to participate in his son's many school-related and extracurricular activities, such as football.
The Petitioner's testimony, and the proven circumstances of the situation, establish without question that he is an honest, forthright person who has candidly admitted a past mistake and who has worked actively, in the approximate six years which have elapsed since the conduct was committed, to rectify that blemish on his record. His efforts to rehabilitate himself
personally and professionally involved his active participation as a parent for his son in his son's school life and otherwise, and participation in church and community activities. During the time period which has elapsed since the conduct in question occurred, he has sufficiently rehabilitated himself both personally and professionally so as to justify the finding that he has demonstrated trustworthiness and fitness to engage in the business of insurance. Indeed, three other states, after having the circumstances of his conviction fully disclosed to them, have licensed him or retained him as a licensee insurance agent.
The Petitioner is a navy veteran of Vietnam, having served three tours in the Vietnam war, for which service he was decorated. He had a number of security clearances, including a top secret security clearance based upon his work in the field of communications and cryptology during that war. This honorable service, the efforts he has made to improve himself personally and professionally before and since the subject conduct occurred, the fact that it was an isolated incident on his record, the fact that it did not involve any established intent to defraud or deceive on his part, the fact that he is an active, positive parental role model, community member and church member, and his general demeanor at hearing of honesty and forthrightness convinces the Hearing Officer that the isolated incident of misconduct he committed did not involve a demonstrated lack of fitness and trustworthiness to engage in the business of insurance. Quite positively, the Petitioner has demonstrated his fitness and trustworthiness to engage in that business.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the subject matter and of the parties to this proceeding pursuant to Section 120.57(1), Florida Statutes.
The Petitioner has applied for licensure as a life, health and variable annuities insurance agent. The applicant for such a license or permit has the burden of proof of his entitlement to such licensure. Florida Department of Transportation v. J.W.C. Company, Inc., 396 So.2d 778 (Fla. 1981).
The Respondent, by its Letter of Denial, has alleged that the Petitioner is in violation of five provisions of the insurance code, to-wit: Sections 626.611(1); 626.611(7); 626.611(14); 626.621(8); and 626.785(1), Florida Statutes. The provisions of Section 626.611, Florida Statutes, relied upon by the Respondent provide the pertinent grounds for compulsory refusal of licensure. Those relevant provisions are as follows:
626.611 Grounds for compulsory refusal, suspension or revocation of agents, solicitors, or adjustor's license, or service representatives, supervisory, or managing general agents, or claims investigators permit.
* * *
(1) Lack of one or more of the qualifications for the license or permit as specified in this code.
* * *
(8) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance.
* * *
(14) Having been found guilty of, or having pleaded guilty or nolo contendere to a felony or crime punishable by imprisonment of one year or more under the law of the United States of America or of any state thereof or under the law of any other country which involves moral turpitude, without regard to whether a judgement of conviction has been entered by the court having jurisdiction of such cases.
* * *
626.621 Grounds for discretionary refusal, suspension, or revocation of agents, solicitors, or adjuster's license or service representatives, supervisory or managing general agent's or claims investigator's permit.
* * *
(8) Having been found guilty or having pleaded guilty or nolo contendere to a felony or a crime punishable by imprisonment of 1 year or more under the law of the United States of America or of any state thereof or under the law of any other country, without regard to whether a judgment of conviction has been entered by the court
jurisdiction over such cases.
* * *
626.785 Qualifications for license.
The Department shall not grant or issue a license as a life agent to any individual found by it to be untrustworthy or incompetent,...
In essence, the Petitioner has been refused licensure because he has allegedly been guilty of a felony involving moral turpitude under the laws of the United States and, as allegedly demonstrated thereby, lacks fitness or trustworthiness to engage in the business of insurance and is incompetent or unqualified for licensure under the above-quoted authority. The issue of whether the Petitioner was convicted of a crime involving moral turpitude will be examined first.
The federal statute under which the Petitioner was convicted, Title 26, Section 7206(2), Unite4 States Code, provides pertinently as follows:
(2) Aid or Assistance. Willfully aids or assists in, or procures, counsels, or advises the preparation or presentation under, or in connection with any matter arising under the Internal Revenue laws of a return, ...
which is fraudulent or is false as to any material matter, whether or not such falsity or fraud is with the knowledge or consent of
the person authorized or required to present such return, affidavit, claim, or document; or ....
Firstly, it should be pointed out that the last clause of the quoted federal statute, involving whether or not the falsity or fraud is with the knowledge or consent of the person authorized or required to present the return, refers to the immateriality of the knowledge or intent of the tax payer, who is the person authorized or required to present the tax return to the Internal Revenue Service. The Petitioner was not that person but merely the advisor concerning and the preparer of the tax returns in question, so this last clause concerning the immateriality of whether the falsity or fraud is within the knowledge of the person required to present the return does not apply to the Petitioner and his situation, with regard to the acts committed for which he was convicted. Turning now to the question of whether the acts committed by the Petitioner constituted a crime of moral turpitude, for which he was convicted, one must analyze the language of this broadly worded general statute in terms of proscription of conduct which is both fraudulent or merely false. The unrefuted evidence of record reveals that the Petitioner's conduct in advising his clients and assisting in the preparation of their tax returns, so that they could claim the disputed tax shelters in question, was not fraudulent because it involved no element of deceitful intent. The Petitioner's conduct at most might have involved the element of assisting in the preparation of a "false" tax return, although here, also, the evidence reveals that the information on the return was, indeed, accurate and not false. It merely contained the claim of tax shelters which the I.R.S. later deemed to be illegal which resulted in underpayment of taxes. In reality, the Petitioner's evidence shows that his conduct, in effect, amounted to a mistake as to the legal import of the tax information he provided in his role of advising clients concerning how to prepare tax returns in order to claim the disputed tax shelter treatment. He did not intend to defraud the government nor did he actually intend to submit a false return. This conclusion is borne out by the fact, established in an unrefuted way by the Petitioner's evidence, that as soon as his attorney advised him that the tax shelter situations he was advising and creating for his clients were illegal, he ceased employing that tax avoidance scheme and advised his clients to do so.
The Supreme Court of Florida has defined moral turpitude as follows:
Moral turpitude involves the idea of inherent baseness or depravity in the private social relations or duties owed by man to man or man to society (citations omitted). It has also been defined as anything done contrary to justice, honesty, principle or good morals, though it often involves the question of intent as when unintentionally committed through error of judgment when wrong was not contemplated.
See State Ex Rel. Tullidge v. Hollingsworth, 108 FL 607, 146 So.2d 660, 661 (1933).
Fraudulent conduct involves the inherent element of scienter or specific dishonest, deceitful intent, which must be exhibited by an accused when he contemplates and commits the conduct in question. Brod v. Jernigan, 188 So.2d 575 (Fla. 2d DCA 1966). Here, there is no question, given the unrefuted
evidence, culminating in the above Findings of Fact, that the Petitioner held no such fraudulent, dishonest intent in engaging in the conduct in question, for which he was ultimately convicted of the violation of the above-quoted federal statute. Although his conduct may have been "willful" in terms of the Petitioner knowingly advising his clients and assisting them in preparing tax returns which incorporated the use of certain tax shelter devices which were ultimately determined to be illegal by the Internal Revenue Service, and for which the Petitioner, along with others similarly situated, was prosecuted, that was only a general intent or willful performance of the acts in question; it was not conduct fraught with specific intent to defraud or deceive the government.
Since the criminal statute involved in the Petitioner's conviction contains such a broad proscription concerning conduct involved in the preparation and submittal of tax returns as to encompass both mere false information with which tax returns are prepared, as well as fraudulent information and preparation, it is clear that if moral turpitude involves the inherent question of intent, as the Tullidge decision holds, then the question of the Petitioner's intent in committing the acts which ultimately led to his federal conviction must be examined.
It having been determined that no fraudulent, deceitful intent was involved in the Petitioner's commission of the crime, it must be concluded that his crime was not one of moral turpitude under the facts and circumstances which he established in the record in this proceeding and which were unrefuted. Indeed, the case of Pearl v. Florida Board of Real Estate, 394 So.2d 189 (Fla. App. 3d Dist. 1981), stands for the proposition, citing Tullidge v. Hollingsworth supra, that intent is a key element of a consideration of whether a crime is one of moral turpitude and further provides that the facts and circumstances underlying the particular crime involved should be considered in determining whether a petitioner or respondent, as the case may be, has committed a crime involving moral turpitude. Thus, in addition to clear unrefuted proof by the Petitioner that his criminal act for which he pled guilty, did not involve the element of deceit or fraud and, thus, was not a crime of moral turpitude under the above analysis and decisional law, it is also patently apparent that whether or not the criminal statute under which he was convicted involved the element of fraud, that the underlying facts and circumstances surrounding his commission of the crime can be examined in order to make a determination of whether moral turpitude is actually involved and that the mere wording of the statute under which he was convicted does not automatically dictate it to be a crime of moral turpitude.
Further, the statute under which the Petitioner was convicted proscribes the willful aiding or assisting in the preparation of false or fraudulent tax returns. There is a distinction in the law between "moral turpitude" and "knowingly and willfully". The Circuit Court of Appeals for the Fifth Circuit drew that distinction in construing a similar federal criminal statute in McBride v. U.S., 225 F.2d 249 (Ct. of Appeal, 5th Cir. 1955). The court, in drawing that distinction, held:
In some penal statutes, the word `willful' connotes moral turpitude or evil of mind, but in others it means no more than that the interdicted act is done deliberately and with knowledge. We think that clearly is the sense in which the term is used in the statute....
In summary, in consideration of the above decisional authority, it is clear that the Petitioner's underlying conduct and the motives under which it was committed which led to his conviction must be examined and that those facts and circumstances must be weighed in determining whether the crime he committed was one of moral turpitude. It clearly was not under the circumstances in this case. His acts were willful only in the sense that he intentionally did them to assist his clients in avoiding a certain amount of income tax, but he harbored no specific fraudulent or deceitful intent to dishonestly deprive the government of tax revenues. Further, the evidence reveals that his plea of guilty to the crime in question was in reality a "plea of convenience" in order to avoid the expense of trial, which he was unable to afford, and was the result of a negotiated settlement with the Justice Department in order to avoid the expense and anguish of trial in return for a very light penalty. Thus, under the totality of the circumstances involved his crime was not one of moral turpitude. See, Pearl supra.
The remaining bases for denial, both under the compulsory and discretionary statutory bases for denial, involve a consideration of whether the Petitioner displayed a lack of fitness and trustworthiness or qualifications to engage in the profession and practice of an insurance agent. The unrefuted evidence of record, which is accepted and culminated in the above Findings of Fact, reveals that indeed the Petitioner has affirmatively demonstrated his fitness and trustworthiness to engage in the business of insurance and no countervailing evidence has been offered, aside from the evidence concerning the conviction itself.
"Fitness" and "trustworthiness" are matters which are to be determined by the fact finder. They are judgments which must be based upon considerations of credibility, motivation and purpose. See, School Board of Leon County v. Hargis, 400 So.2d 103 (Fla. 1st DCA 1981). Aside from introducing evidence concerning the Petitioner's conviction of the United States statute involved and quoted above, the Respondent did not adduce any evidence concerning the Petitioner's unfitness or untrustworthiness nor otherwise any lack of qualifications to engage in the business and practice of insurance and insurance agency. To the contrary, the record is replete with evidence affirmatively showing the Petitioner's fitness and trustworthiness to engage in that profession. Firstly, this incident was a single, isolated one in the Petitioner's entire career, as an otherwise responsible adult, decorated military hero, and actively practicing, licensed insurance agent in good standing in three other jurisdictions. One such isolated incident does not make him unfit to engage in the business of insurance.
Otherwise, the Petitioner has demonstrated honesty, integrity and commitment to competent service in the insurance profession throughout his entire career. The evidence of record shows that he is licensed in three other states in good standing; and his business associates have attested to his competence, honesty, and reputation for fair dealing in the course of his practice. The evidence also reveals that he is an active church member and worker and is a caring, successful and responsible parent to his son. His commitment to improving his competence and qualifications in practicing in the field of insurance is shown by unrefuted evidence, which shows that over the years since this incident occurred, he has trained himself and successfully achieved positions or agency qualifications in the field of insurance, which demonstrate enhanced competence and qualification. He desires to further his professional "reach" and qualification by becoming licensed in Florida and
ultimately moving to Florida to practice after having successfully maintained a licensure and completing more than required continuing education requirements in the other states in which he is licensed.
The unrefuted evidence of record simply, affirmatively shows that the Petitioner is entirely fit and trustworthy to engage in the business of insurance and possesses more than ample qualifications to engage in that business and profession in Florida.
In essence, the Respondent's entire basis for denying his licensure concerned his plea of guilty to a crime involving the element of willfulness, which, in effect, it equated to moral turpitude. The above analysis shows clearly, when viewed against the unrefuted evidence culminating in the above Findings of Fact, that no crime of moral turpitude was committed. Further, the Petitioner adequately explained his rationale for the guilty plea as involving the element of convenience and as the result of a negotiated settlement to avoid the expense, anguish and risks of litigation. The Respondent has not established, in the face of the preponderant evidence adduced by the Petitioner, that this one aberrant act in the lifetime of the Petitioner makes him unfit, untrustworthy, or unqualified to engage in the business or profession of insurance agency as a licensed Florida insurance agent.
Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is therefore,
RECOMMENDED that the Petitioner's application for licensure as a nonresident life, health and variable annuities insurance agent should be granted.
DONE AND ENTERED this 7th day of February, 1991, in Tallahassee, Leon County, Florida.
P. MICHAEL RUFF Hearing Officer
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, FL 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 7th day of February, 1991.
APPENDIX TO RECOMMENDED ORDER IN CASE NO. 90-3069
Petitioner's Proposed Findings of Fact 1-4. Accepted.
5. Rejected, as not clearly established by the evidence of record.
6-14. Accepted.
Respondent's Proposed Findings of Fact 1-4. Accepted.
5. Rejected, as not clearly established by the
evidence of record.
COPIES FURNISHED:
Mr. Tom Gallagher
State Treasurer and Insurance Commissioner
Department of Insurance and Treasurer
The Capitol, Plaza Level Tallahassee, FL 32399-0300
Don Dowdell, Esq.
General Counsel
Department of Insurance and Treasurer
The Capitol, Plaza Level Tallahassee, FL 32399-0300
Preston Hursey, Jr., pro se Post Office Box 43643 Washington, DC 20010
Willis F. Melvin, Jr., Esq. Andrew Levine, Esq.
Department of Insurance Division of Legal Services
412 Larson Building Tallahassee, FL 32399-0300
NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.
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AGENCY FINAL ORDER
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OFFICE OF THE TREASURER DEPARTMENT OF INSURANCE
IN THE MATTER OF:
DOAH CASE NO.: 90-3069
PRESTON HURSEY, JR. Case No. 90-L-164WFM
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FINAL ORDER
This cause came before the undersigned Treasurer and Insurance Commissioner of the State of Florida, acting in this capacity as Insurance Commissioner, for consideration and final agency action. On April 9, 1990, a letter denying the Petitioner's application for licensure as a non-resident life, health and variable annuities insurance agent was filed charging the Petitioner with various violations of the Insurance Code. The Petitioner timely filed a request for a formal proceeding pursuant to section 120.57(1), Florida Statutes.
Pursuant to notice, the matter was heard before P. Michael Ruff, Hearing Officer, Division of Administrative Hearings, On September 21, 1990.
After consideration of the evidence, argument and testimony presented at hearing, and subsequent written submissions by the parties, the hearing officer issued his Recommended Order (Attached as Exhibit "A"). The hearing officer recommended that the Petitioner's application be granted. Timely exceptions to the Recommended Order were filed by the Respondent.
RULINGS ON RESPONDENT'S EXCEPTIONS TO FINDINGS OF FACT
The Respondent takes exception to the Hearing Officer's Finding of Fact No. 7. Based upon review of the relevant law, the hearing officer has improperly permitted the Petitioner to relitigate his guilty plea as prohibited in McGraw v. Department of State, Division of Licensing, 491 So2d 1193 (Fla. 1st DCA 1986); and The Florida Bar v. Vernell, 374 So2d 473 (Fla. 1979). His finding that the Petitioner's guilty plea to the felony Aiding or Assisting Presentation of False Income Tax Return did not constitute moral turpitude, is not supported by competent and substantial evidence. The Information charging Mr. Hursey states "...the defendant PRESTON HURSEY, JR.,... willfully aided, assisted in, procured, counseled and advised the preparation and presentation, to the Internal Revenue Service of U.S. Individual Income Tax Returns, Forms 1040, either individual or joint, for taxpayers and calendar years hereinafter specified, which were false and fraudulent as to material matters in that the returns stated that the said taxpayers had received taxable income in the amounts hereinafter specified, whereas, as the defendant, PRESTON HURSEY, JR. then and there well knew and believed, the taxpayers received substantial additional taxable income, ..." (emphasis added) Mr. Hursey pled guilty to these charges as verified by the Judgement of the U.S. District Court which was entered on November 2, 1988. It is clear, based upon his plea to the charges, that he willfully used deceit in
these transactions. Therefore, this conviction involves moral turpitude. Accordingly, the Hearing Officer's Finding of Fact No. 7 is rejected to the extent that it finds that the referenced crime does not involve moral turpitude.
The Respondent also takes exception to Finding of Fact No. 10 which found that the Petitioner's conduct did not involve a demonstrated lack of fitness and trustworthiness to engage in the business of insurance. For the same reasons indicated above the hearing officer improperly relitigated the guilty plea. It is within the discretion of the Department of Insurance to determine whether a crime demonstrates a lack of fitness or trustworthiness to engage in the business of insurance. See Paisley v. Department of Insurance,
526 So2d 167 (Fla 1st DCA 1988); and Natelson v. Department of Insurance, 454 So2d 31 (Fla. 1st DCA 1984).
RULINGS ON RESPONDENT'S EXCEPTIONS TO CONCLUSIONS OF LAW
The Respondent takes exception to the Hearing Officer's Conclusion of Law that the crime the Petitioner pled guilty to did not involve moral turpitude and that the Petitioner did not demonstrate a lack of fitness or trustworthiness to engage in the business of insurance. The Petitioner is entitled to present mitigating circumstances; however, he is not entitled to a trial de novo regarding his guilty plea. See McGraw v. Department of State, Division of Licensing 491 So.2d 1193 (Fla. 1st DCA 1986); and The Florida Bar v. Vernell,
374 So.2d 473 (Fla. 1979). Under the present statutory scheme, it is enough that the Respondent pled guilty to a felony charge involving moral turpitude. Also, the Respondent's construction of the term "lack of fitness or trustworthiness to engage in the business of insurance" as including a plea of guilty to a felony charge involving moral turpitude is well within the Department's wide range of discretion in the interpretation of Section 626.611(7), Florida Statutes. See -Natelson, supra. The Information states that Mr. Hursey "willfully" aided and further states that Mr. Hursey "then and there well knew and believed, the taxpayers received substantial additional taxable income". Mr. Hursey pleaded guilty to these charges and such actions meet the definition of fraudulent conduct `as defined in Brod v. Jernigan, 188 So. 2d 575 (Fla. 2d DCA 1966). His conduct also meets the definition of moral turpitude as defined in State Ex Rel. Tullidge v. Hollingsworth, 108 Fla. 607, 146 So. 2d 660, 661 (1933)
Finally, the Respondent notes that the Petitioner's previous licenses and eligibility for licensure were revoked on November 7, 1990. As a matter of law, I may take official recognition of official records of the department in making a determination concerning a Conclusion of Law. Attached as Exhibit "B" is a copy of the Notice of Revocation. The Petitioner did not appeal the Notice of Revocation. Pursuant to Section 626.641(2), Florida Statutes the Department is not permitted by law to issue a license to a person whose eligibility for licensure has been revoked, for a period of two (2) years from the date of the final order.
Upon careful consideration of the record, and being fully advised in the premises, it is ORDERED:
The Findings of Fact as determined by the Hearing Officer, except as modified herein, are adopted.
The Conclusions of Law as determined by the Hearing Officer, except as modified herein, are adopted.
The Hearing Officer's recommendation that the Petitioner's application for licensure be granted, is rejected as contrary to the law and ACCORDINGLY the application for licensure as a non- resident life, health and variable annuity insurance agent filed by PRESTON HURSEY, JR. is hereby DENIED.
Any party to these proceedings adversely affected by this Order is entitled to seek review of this Order pursuant to Section 120.68, Florida Statutes,
and Rule 9.110, Florida Rules of Appellate Procedure. Review proceedings must be instituted by filing a Notice of Appeal with the General Counsel, acting as Agency Clerk, 412 Larson Building, Tallahassee, Florida 32399-0300 and a copy of the same and filing fee, with the appropriate District Court of Appeal within thirty (30) days of rendition of this Order.
DONE and ORDERED this day of April 1991.
TOM GALLAGHER
Treasurer and Insurance Commissioner
Copies furnished to:
Willis F. Melvin, Esquire Division of Legal Services
412 Larson Building Tallahassee, FL 32399-0300
Preston Hursey, Jr.
P. O. Box 43643 Washington, D.C. 20010
P. Michael Ruff Hearing Officer
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, FL 32399-1550
| Issue Date | Proceedings |
|---|---|
| Feb. 07, 1991 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Apr. 12, 1991 | Agency Final Order | |
| Feb. 07, 1991 | Recommended Order | Respondent not shown to be unfit as insurance agent where tax avoid scheme he used for clients didn't involve deceit, fraud, no moral turpitude, plea explained |
ZURICH INSURANCE COMPANY (US BRANCH) vs DEPARTMENT OF REVENUE, 90-003069 (1990)
DEPARTMENT OF INSURANCE AND TREASURER vs. MELVIN MOSES LESSER, 90-003069 (1990)
INDUSTRIAL CONCRETE INDUSTRIES, INC. vs. DEPARTMENT OF REVENUE, 90-003069 (1990)
HEFTLER CONSTRUCTION COMPANY vs. DEPARTMENT OF REVENUE, 90-003069 (1990)
